After President Johnson signed the law in 1964, 1,000 Community Action agencies sprouted up around the country to help the nation's poorest families.

"The fear was these programs were going to cause social unrest,” Dayton said. “That is why a lot of them were cut back or eliminated; the fact is that it is the opposite. By elevating the worse effects of poverty they really help stabilize our communities and our society. They are doing the Lords work."

As the annual Kids Count Report reveals, 38% of American Indian children and nearly half of black children in Minnesota were living in poverty in 2012. Those statistics showed an increase since 2005.

"It shows the disparities between people who are Caucasian and those who are people of color,” Dayton said. “It permeates housing, it permeates employment and education and everything, so we have a lot of work ahead of us."

One of Governor Dayton's Republican opponents said the best way to remedy rising poverty statistics is improving the educational opportunities that are available.

"The ticket to the American dream is good education, using your God given talents to work your heart out and to make sure that you have a good livelihood for your family and have an economy set up where we have good jobs that pay and stay versus just welfare dependency," said former Minority Leader and gubernatorial candidate Marty Seifert.

Governor Dayton said his solution to Minnesota's poverty problem is increasing the state minimum wage, along with early childhood education.

"That's part of the connection they (Republicans) do not make,” Dayton said. "They want to pull away programs without giving people the opportunity to earn their way to the American dream and that isn't going to lead to anything more positive for our society."

If elected governor, Seifert says he will look for ways to increase incentives and grow the economy to lower the dependency on welfare programs.

"In a lot of cases we also have, I think, a welfare system in Minnesota that kills the work ethic that gives people disincentives to work,” Seifert said. “We aren't going to lift people out of poverty unless we provide good incentives for people to work and to and provide for their own means."